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AAC Block Future India

Current Housing Deficit, development of Smart Cities and increased utilization of Green Building Materials to Fuel India Blocks and Bricks Market in Future : Ken Research

Center’s norms of compulsory use of material made out of fly-ash within 100 kilometers radius of thermal plants is expected to drive the sales of fly-ash, concrete blocks and AAC blocks.

India’s ambitious initiative of “Housing for All by 2022”is expected to one of the major growth driver for the blocks and bricks industry of the country. The recent announcement of granting an “infrastructure” status to the “Affordable Housing” in Budget 2017 is expected to result in increased participation from private players to meet the existing deficit of 20 million housing units.

With National Housing Bank agreeing to refinance individual loans worth INR 200 billion as of January 2017 and several other government initiatives such as development of 100 smart cities for which INR 480 billion has been allocated, the market is anticipated to register stupendous growth.

Ken Research announced its latest publication on “India Bricks and Blocks Market to 2021 – Focus on AAC Block Segment” provides a comprehensive analysis of the brick and blocks market in India and covers market size and segmentation of overall market. The report covers the further segmentations of the overall market based on clay brick, fly-ash brick, concrete block, AAC block and others. The sub segments of concrete blocks (Solid, hollow, CLC and RMC) have been discussed separately and analysis have presented individually. Similarly, the market of clay brick has been segmented depending on the manufacturing technique. The report covers detailed profiles of leading players in the different sub segments of the market. The report provides detailed analysis of segments, trends & developments, growth drivers and major restraints and challenges and porters five forced model within the industry. The report also serves as a benchmark for existing players and for new players who wish to capitalize on the market potential and investors who are looking forward to venture into blocks and bricks market in India. The future analysis of India AAC block market and overall India Blocks and Bricks market has also been discussed along with recommendations from analyst view.

India follows the traditional method of brick making and it is reported that India has more than 125,000 registered/unregistered clay brick kilns which satisfy the annual demand of more than 250 billion bricks. India’s red clay brick industry uses conventional firing techniques, a process which is highly labor intensive and has fuel requirement, and is dominated by small scale brick kilns. As a result, environmental concern has become a big issue as traditional method consumes fertile soil, consumes a lot of energy (25 million tonnes of coal and 350 million tonnes of soil annually) and emits greenhouse gas which has led to the demand for green building materials.

Several new eco-friendly substitutes of clay bricks such as fly-ash bricks, AAC blocks and concrete blocks which are manufactured using 60-65% of fly ash (a waste from coal based thermal plants) have gained a lot of traction in the Indian market. Although AAC blocks have several beneficial attributes, they are the recent entrants to the market and accounted for a very small market share of total brick market, as of FY’2016.

India blocks and bricks market is expected to witness a decline in its growth rate in FY’2017 ending March as the real estate sector has been adversely affected by the effects of demonetization since November 2016. As bricks and blocks market in India is an informal one to a large extent, demonetization has been a big blow to the growth prospects of this sector in the short term. North India market has been more affected as compared to Southern market as more transactions take place through banking channels and off-take of government projects. With several construction projects in pipeline, the market is expected to overcome the short term effects of demonetization and grow at a stupendous pace post FY’2018 ending March.

“Companies are required to market AAC blocks by drawing attention about the overall cost and construction time of the structure that they intend to construct. Mouth-to-mouth marketing highlighting the value proposition of the product is very vital in this sector. Customers would naturally opt for higher quality products, especially when recommended by their contractors. Hence, it is imperative for manufacturers to indulge in below the line publicity to these contractors and grow their network by offering early lucrative discounts”, according to Research Analyst, Ken Research.

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